Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (35743)	6/25/1998 10:44:00 AM
From: DJBEINO	Respond to of 53903

Kobe Steel to Continue DRAM Joint Venture Business June 25, 1998 (TOKYO) -- Kobe Steel Ltd., a major steel manufacturer , announced on June 19 that Texas Instruments Inc. (TI), its partner in a chip-making joint venture, would drop out and that Micron Technology Inc. would be the new partner. The joint venture company, KTI Semiconductor, Ltd., is 75 percent owned by Kobe Steel and 25 percent by TI. But TI has decided to sell its share to Micron. Prior to Kobe Steel's announcement, TI revealed on June 18 that it would sell all of its DRAM chip operations to Micron. Executive vice president Masumi Sato said that Kobe Steel had been considering a move to sell its semiconductor businesses to another company and withdraw from the sector. The market for 16Mb DRAM chips, which are the joint venture's core products, has nearly collapsed. In the fiscal year ended March 1997, KTI registered a loss of 13 billion yen (US$94 million) on total sales of 19.6 billion yen (US$ 140 million). And, in the latest fiscal year ended March 1998, KTI had losses of 19.1 billion yen (US$137 million) on sales of 31.1 billion yen (US$223 million). Kobe Steel has decided to continue in the business because its new partner in the venture is Micron, the world's largest specialty maker of DRAM chips. Micron is strong in technologies needed for producing chips at low costs. Yukio Sakamoto, general manager of Kobe Steel's semiconductor group, said he expects that the company will be able to increase the efficiency of its DRAM production to 1.5 or two times the current level if it introduces Micron's manufacturing technology. However, in comparison to other companies like TI and Micron, Kobe Steel's semiconductor business strategy appears to be difficult to implement. TI and Micron have decided to go ahead with the reorganization so that each company can specialize in making products to suit a segment of the semiconductor market. TI is specializing in digital signal processors (DSPs) and Micron in DRAM chips. Kobe Steel entered the semiconductor sector in 1990 in an attempt to diversify its operations. That was a trend among major Japanese steel manufacturers. However, now that the DRAM market is in such dire straits, the company has seriously considered a complete retreat from the field. Another reason behind the company's decision to go on with the tie -up is that it wants to protect the jobs of the venture's 830 workers, according to Sato. Large Japanese companies typically find it difficult to dismiss personnel. Sakamoto said that he wants to see the venture turning a profit in fiscal 1999, as it is not easy to justify keeping a business running if the only purpose is to protect jobs nikkeibp.asiabiztech.com